California Lemon Law Lawyer Blog

A bill moving through the California Legislature, AB 1215, will require California used car dealers selling junk, salvage or flood vehicles to put a sign on the vehicle warning buyers the car is a junk, salvage and flood vehicles. Prior to any sale, the dealers will also have to provide the buyer a vehicle history report from the National Motor Vehicle Title Information System (NMVTIS). NMVTIS is an electronic database that provides consumers with information about a vehicle's condition and history.

The bill has passed the Assembly and a key Senate committee. The car dealers' association is supporting the bill and hence is almost sure to be approved by the Senate and Governor.

The rationale for the bill is that athough diligent purchasers can arguably already search and retrieve vehicle history information from Carfax.com or Autocheck.com, the proposed disclosure will assist consumers who are on a car lot comparing two vehicles side by side. If one vehicle has a warning (and one does not), the consumer will be able to make an informed decision after asking the dealer to see a copy of the NMVTIS report.

The sponsor of the bill, Consumers for Auto Reliability and Safety (CARS), explained that

vehicles with a history of prior major damage tend to be
unsafe, and worth far less than similar undamaged vehicles.
For example, they may lack air bags, have bent frames that
make them prone to tipping over in an emergency braking
situation, or have electronic systems that are corroding and
will inevitable malfunction because the vehicle was
submerged in flood water. In fact, whether a vehicle was
totaled or not may be the single most important piece of
information that car buyers need to know, in order to make
an informed comparison between two otherwise similar
vehicles. . . . AB 1215 promises to be a vitally important
next step toward curbing salvage and rebuilt wreck frauds
and ensuring that NMVTIS fulfills its potential for
benefiting the public.

Christopher Jensen reports in the NY Times that auto manufacturers are working against proposals to provide more authority and resources to the NHTSA, the federal auto safety agency. The agency has long been hobbled with inadequate resources. The maxiumum fine that can be levied against manufacturers for violating the safety act is not sufficient to provide any deterrence. Bills in Congress would be enhance consumer auto safety.

The Senate is debating financial reform bill and the car dealers want no part of it. The proposal, backed by the Obama administration, provides for a new consumer protection agency that would have jurisdiction over banks and other lenders. The car dealers, who arrange financing on most car purchases, are lenders.

Republican Sen Brownback has an amendment to exempt the car dealers. In opposing the amendment, consumer advocates point out that car dealers often take advantage of consumers in setting the terms of leases and purchases. Dealers, for example, sell cars only to later demand an additional down payment to complete the deal.

The Pentagon supports the bill because low-income military people are often victimized by shady car dealers that set up shop just outside many bases.

Continue reading "Car Dealers Afraid of New Federal Regulator" »

In California and other states, the titles to repurchased lemon vehicles are branded "lemon buyback" and the titles to severly wrecked cars are branded "salvage" or words to that effect. A major problem is the ability of car wholesalers and others to buy such vehicles and then obtain clean titles in other states, a practice known as title-washing. Of course, the consumers who buy such vehicles are the victims of this practice.

A solution to this problem would be nationwide implementation of the National Motor Vehicle Title Information System, which allows users to instantly check titles on all vehicles in states participating in the system. Using this system, the problem of lemon laundering and title-washing would disappear saving consumers millions of dollars. The System was authorized by Congress in 1992 as part of the Anti Car Theft Act.

The catch is that only nine states, not including California, have joined the system. Another problem is that, so far, consumers do not have access to the system.

Chris Jensen reports in the August 25, 2007, edition of the New York Times that only $11 million would be required to implement the system nationwide. Congress so far has failed to appropriate the money. Why has not Congress taken this step? It cannot be the small amount of money involved so some influential groups must be against implementing the system. Let's take a wild guess--insurance companies and rental car companies that like to resell wrecked cars? Car dealers?

A bill in the California Legislature would ban the sale of cars and trucks that were declared total loss vehicles due to salt water damage. Hurricanes Katrina, Rita and Wilma in 2005 caused severe damage to over 600,000 vehicles; about half of these vehicles will be sold somewhere in the U.S. Unsurprisingly, salt water adversely affects the electronics that control various components in vehicles such as the air bags and is highly corrosive. Some cars even become repositories of toxic materials after being hit by the salt water.

Certain unscrupulous professional detailers conceal salt water damage by, among other thingks, steam-cleaning the engine and re-blackening rubber seals to hide salt marks.

The problem is that some car dealers are buying these vehicles and reselling them with no disclosure of the cars’ histories.

Passage of Senate Bill 498 would go a long way towards protecting buyers from unwittingly buying salt-damaged cars and trucks. The bill has been approved by Senate Committees as of this date. The author of the bill is State Senator Jenny Oropeza, who is from Carson, CA. If you wish to express your support for the bill call or write your own state Senator and Assemblyperson. Addresses are available at http://www.leginfo.ca.gov/yourleg.html.

What if a member of the Armed Forces stationed in California has a lemon law problem? What if his or her vehicle was purchased in some other state? Does he or she have lemon law protection? As the law is today, the California lemon law would not apply to the vehicle. However, a bill in the Legislature sponsored by CARS, a leading consumer advocate organization, would change that. Under pending Senate Bill 234, authored by Senator Ellen Corbett, military personnel stationed here will have the benefit of the California lemon law. Kemnitzer, Anderson, Barron & Ogilvie LLP supports this bill.